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Performance Bond
It is often for a construction contract that the employer requires the contractor to provide some security to guarantee the fulfillment of the sublet contract and to protect the employer in respect of the additional costs caused by the contractor’s failure to perform . A bond is just a simple contract , separated from the construction contract , by which someone ( usually a bank or guarantor ) agrees to pay to the employer a certain sum of money if the defined terms of the bond are met . The contractor may have to deposit a certain amount of money into and secured by the bank , and / or to pay financial charges and interests to the bank for the issue of a bond .
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